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Managing Retailing, Wholesaling, and Physical Distribution

Managing Retailing, Wholesaling, and Physical Distribution. Four Levels of Retail Service. Self-service Self-selection Limited-service Full-service. Broad. Breadth of product line. Narrow. Value added. Low. High. Retail Positioning Map. Bloomingdale’s. Wal-Mart. Tiffany. Kinney

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Managing Retailing, Wholesaling, and Physical Distribution

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  1. Managing Retailing, Wholesaling, and Physical Distribution

  2. Four Levels of Retail Service • Self-service • Self-selection • Limited-service • Full-service

  3. Broad Breadth of product line Narrow Value added Low High Retail Positioning Map Bloomingdale’s Wal-Mart Tiffany Kinney Shoe

  4. Classification Of Retailer Types Narrow Product Line, Deep Assortment Wide Variety of Product Lines i.e. Clothing, Home Furnishings, & Household Items Wide Variety of Food, Laundry, & Household Products Limited Line of High-Turnover Convenience Goods Broad Product Line, Low Margin, High Volume Inexpensive, Overruns, Irregulars, and Leftover Goods Large Assortment of Routinely Purchased Food & Nonfood Products, Plus Services Broad Selection, Fast Turnover, Discount Prices Store Type Length and Breadth of Product Assortment Specialty Stores Department Stores Supermarkets Convenience Stores Discount Stores Off-Price Retailer Superstores Catalog Showroom

  5. Retailer Marketing Decisions • Target market • Product assortment and procurement • Price • High-markup, lower-volume • Low-markup, higher-volume Services and store atmosphere Store activities and experiences Communications Location 11

  6. Wholesaling All the activities in selling goods or services to those who buy for resale or business use. 15

  7. Why are Wholesalers Used? Wholesaler Functions Selling and Promoting Management Services & Advice Market Information Buying and Assortment Building Bulk Breaking Risk Bearing Financing Warehousing Transporting

  8. 1. Merchant wholesaler • Full-service wholesaler • Limited-service wholesaler 2. Brokers and agents 3. Manufacturers’ and retailers’ branches and offices 16

  9. Provide a Targeted Level of Customer Service at the Least Cost. • Maximize Profits, Not Sales. Higher Distribution Costs/ Higher Customer Service Levels Lower Distribution Costs/ Lower Customer Service Levels Goals of the Logistics System

  10. Transportation Water, Truck, Rail, Pipeline & Air Logistics Systems Order Processing Submitted Processed Shipped Costs Minimize Costs of Attaining Logistics Objectives Logistics Functions Warehousing Storage Distribution Inventory When to order How much to order Just-in-time

  11. Rail Nation’s largest carrier, cost-effective for shipping bulk products, piggyback Truck Flexible in routing & time schedules, efficient for short-hauls of high value goods Water Low cost for shipping bulky, low-value goods, slowest form Pipeline Ship petroleum, natural gas, and chemicals from sources to markets Air High cost, ideal when speed is needed or to ship high-value, low-bulk items Transportation Modes

  12. 1. Speed. 2. Dependability. 3. Capability. 4. Availability. 5. Cost. Checklist for Choosing Transportation Modes

  13. Speed Dependability Capability Availability Cost (Door-to- door delivery time) (Meeting Schedules on Time) (Ability to Handle Various Products) (No. of Geographic Points Served) (Per Ton- Mile) Rating Transportation Modes Rail 3 4 2 2 3 Water 4 5 1 4 1 Truck 2 2 3 1 4 Pipeline 5 1 5 5 2 Air 1 3 4 3 5 Source: See Carl M. Guelzo; Introduction to Logistics Management Englewood Cliffs, NJ: Prentice Hall, 1986), p. 46.

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